Bioniche Reports Fiscal 2008 Year-End Results



    
    - increases in revenues and gross profit margin over Fiscal 2007 -

    (all figures are in Canadian dollars unless otherwise noted)
    

    BELLEVILLE, ON, Sept. 19 /CNW/ - Bioniche Life Sciences Inc. (TSX: BNC),
a research-based, technology-driven Canadian biopharmaceutical company, today
announced financial results for its 2008 fiscal year ended June 30, 2008.
    "A highlight of the fiscal year was the announcement in $25 million of
non-dilutive financing for the scale-up of our E. coli O157 vaccine
manufacturing," noted Patrick Montpetit, Chief Financial Officer of Bioniche
Life Sciences Inc. "This was achieved through the support of Canadian and
Ontario government programs and the Business Development Bank of Canada. The
scale-up is now underway, with engineering drawings completed, detailed design
initiated and equipment on order."

    Fiscal 2008 Financial Results Highlights

    Consolidated revenues for the fiscal year increased by 0.7% to
$27.7 million, as compared to $27.5 million in Fiscal 2007. Increased sales of
animal health products in the U.S. and Europe contributed to this increase.
The overall gross profit margin was 57% this fiscal year as compared to 55.6%
in Fiscal 2007.
    Expenses before research and development totalled $17.7 million for the
12 months ending June 30, 2008, which compares to $18.5 million recorded in
the same period last year. This decrease of $0.8 million, or 4%, reflects a
reduction in interest and deferred financing fees.
    Gross research and development (R&D) expenses increased $1.0 million in
Fiscal 2008, reaching $15.9 million compared to $14.9 million in Fiscal 2007.
The majority of these costs can be attributed to the ongoing Phase III
clinical program for the Company's Urocidin(TM) bladder cancer therapy and the
E. coli O157 cattle vaccine development program.
    The basic and fully-diluted net loss per share for Fiscal 2008 was
($0.26) compared to a net loss per share of ($0.32) in Fiscal 2007.
    Earnings before interest, taxes, depreciation, amortization and foreign
exchange were $1.3 million, no change from Fiscal 2007.
    "We continue to work toward North American registrations for our E. coli
O157 vaccine while advancing discussions with potential marketing partners for
our proprietary bladder cancer therapy, Urocidin," added Graeme McRae,
Chairman, President & CEO of Bioniche Life Sciences Inc. "Meeting milestones
with regard to these initiatives will, we believe, greatly enhance shareholder
value in Bioniche."

    About Bioniche Life Sciences Inc.

    Bioniche Life Sciences Inc. is a research-based, technology-driven
Canadian biopharmaceutical company focused on the discovery, development,
manufacturing, and marketing of proprietary products for human and animal
health markets worldwide. The fully-integrated company employs approximately
200 skilled personnel and has three operating divisions: Human Health, Animal
Health, and Food Safety. The Company's primary goal is to develop proprietary
cancer therapies supported by revenues from marketed products in human and
animal health. Bioniche has been named one of Canada's Top Ten Life Sciences
Companies for 2008. For more information, please visit www.Bioniche.com.

    Except for historical information, this news release may contain
forward-looking statements that reflect the Company's current expectation
regarding future events. These forward-looking statements involve risk and
uncertainties, which may cause, but are not limited to, changing market
conditions, the successful and timely completion of clinical studies, the
establishment of corporate alliances, the impact of competitive products and
pricing, new product development, uncertainties related to the regulatory
approval process, and other risks detailed from time to time in the Company's
ongoing quarterly and annual reporting.


    
    Bioniche Life Sciences Inc.
    Amalgamated under the laws of Ontario

                         CONSOLIDATED BALANCE SHEETS

    As at June 30

                                                          2008          2007
                                                             $             $
    -------------------------------------------------------------------------

    ASSETS
    Current
    Cash and cash equivalents                        4,399,065     1,523,597
    Short-term investments                                   -     9,500,000
    Accounts receivable                              6,443,299     5,495,836
    Inventories                                      4,738,765     5,480,167
    Prepaid expenses and deposits                      640,326       658,867
    Foreign currency embedded derivatives               59,693             -
    -------------------------------------------------------------------------
                                                    16,281,148    22,658,467
    -------------------------------------------------------------------------
    Long-term
    Property, plant and equipment                    9,718,157     9,557,359
    Intangible assets                                7,688,698     8,545,215
    Goodwill                                           456,155       456,155
    Deferred financing fees                                  -       209,578
    Long-term accounts receivable                      478,852       100,000
    -------------------------------------------------------------------------
                                                    34,623,010    41,526,774
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Revolving credit facility                        2,593,059       895,619
    Accounts payable and accrued liabilities         8,341,398     6,399,382
    Income and other taxes payable                     104,592       283,845
    Current portion of deferred government
     incentives                                              -       541,282
    Current portion of long-term debt and
     obligations under capital leases                  706,505       123,769
    -------------------------------------------------------------------------
                                                    11,745,554     8,243,897
    -------------------------------------------------------------------------
    Long-term
    Long-term debt                                   1,673,853       421,396
    Obligations under capital leases                 1,176,237       764,933
    Deferred government incentives                   3,606,926     2,986,572
    -------------------------------------------------------------------------
                                                    18,202,570    12,416,798
    -------------------------------------------------------------------------
    Shareholders' equity
    Share capital                                   92,941,966    90,038,524
    Special warrants                                 2,174,008     2,174,008
    Other paid-in capital                            6,056,115     5,528,059
    Deficit                                        (84,751,649)  (68,630,615)
    -------------------------------------------------------------------------
                                                    16,420,440    29,109,976
    -------------------------------------------------------------------------
                                                    34,623,010    41,526,774
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Bioniche Life Sciences Inc.

               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


                                                       Preferred shares -
                             Common shares                  Series 1
                            No.           $             No.           $
    -------------------------------------------------------------------------

    Balance, June 30,
     2006               39,198,140    61,034,185           167       161,000
    Net loss for
     the year                    -             -             -             -
    Issued under
     employee share
     ownership plan        544,777       508,997             -             -

    Fair value of
     stock options
     vested                      -             -             -             -
    Directors'
     remuneration          109,998        77,000             -             -
    Share bonus            286,668       327,615             -             -
    Shares issued on
     exercise of
     options                 2,000         1,889             -             -
    Conversion of
     Series II
     preferred shares    2,388,323     2,932,929             -             -

    Term debt repayment
     made in shares      2,574,108     2,148,007             -             -

    Warrants issued in
     connection with
     the convertible
     term note                   -             -             -             -
    Revolving debt
     principal payments
     made in shares      2,004,745     1,602,963             -             -

    Warrants issued
     to a consultant             -             -             -             -
    Unit offering, net
     of issue costs     14,583,333    12,650,150             -             -
    Shares issued on
     exercise of
     warrants, net
     of issue costs         19,775        35,002             -             -
    -------------------------------------------------------------------------
    Balance, June 30,
     2007               61,711,867    81,318,737           167       161,000
    -------------------------------------------------------------------------
    Less share
     purchase loan               -      (240,000)            -             -
    -------------------------------------------------------------------------
                        61,711,867    81,078,737           167       161,000
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                                    Other
                           Preferred shares -       Special        paid-in
                               Series ll            warrants       capital
                            No.           $             $             $
    -------------------------------------------------------------------------

    Balance, June 30,
     2006               12,000,000    11,731,716             -     4,556,290
    Net loss for
     the year                    -             -             -             -
    Issued under
     employee share
     ownership plan              -             -             -             -

    Fair value of
     stock options
     vested                      -             -             -       221,712
    Directors'
     remuneration                -             -             -             -
    Share bonus                  -             -             -             -
    Shares issued on
     exercise of
     options                     -             -             -           (89)
    Conversion of
     Series II
     preferred shares   (3,000,000)   (2,932,929)            -             -

    Term debt repayment
     made in shares              -             -             -      (162,931)

    Warrants issued in
     connection with
     the convertible
     term note                   -             -             -        93,023
    Revolving debt
     principal payments
     made in shares              -             -             -             -

    Warrants issued
     to a consultant             -             -             -        39,300
    Unit offering, net
     of issue costs              -             -     2,170,251       795,783
    Shares issued on
     exercise of
     warrants, net
     of issue costs              -             -         3,757       (15,029)
    -------------------------------------------------------------------------
    Balance, June 30,
     2007                9,000,000     8,798,787     2,174,008     5,528,059
    -------------------------------------------------------------------------
    Less share
     purchase loan               -             -             -             -
    -------------------------------------------------------------------------
                         9,000,000     8,798,787     2,174,008     5,528,059
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                      Cumulative
                                     translation
                         Deficit      adjustment      Total
                            $             $             $
    -----------------------------------------------------------

    Balance, June 30,
     2006              (53,869,621)      (23,379)   23,590,191
    Net loss for
     the year          (14,760,994)       23,379   (14,737,615)
    Issued under
     employee share
     ownership plan              -             -       508,997

    Fair value of
     stock options
     vested                      -             -       221,712
    Directors'
     remuneration                -             -        77,000
    Share bonus                  -             -       327,615
    Shares issued on
     exercise of
     options                     -             -         1,800
    Conversion of
     Series II
     preferred shares            -             -             -

    Term debt repayment
     made in shares              -             -     1,985,076

    Warrants issued in
     connection with
     the convertible
     term note                   -             -        93,023
    Revolving debt
     principal payments
     made in shares              -             -     1,602,963

    Warrants issued
     to a consultant             -             -        39,300
    Unit offering, net
     of issue costs              -             -    15,616,184
    Shares issued on
     exercise of
     warrants, net
     of issue costs              -             -        23,730
    -----------------------------------------------------------
    Balance, June 30,
     2007              (68,630,615)            -    29,349,976
    -----------------------------------------------------------
    Less share
     purchase loan               -             -      (240,000)
    -----------------------------------------------------------
                       (68,630,615)            -    29,109,976
    -----------------------------------------------------------
    -----------------------------------------------------------



                                                       Preferred shares -
                             Common shares                  Series 1
                            No.           $             No.           $
    -------------------------------------------------------------------------

    Balance, June 30,
     2007               61,711,867    81,318,737           167       161,000
    Transition
     adjustment                  -             -             -             -
    Net loss for
     the year                    -             -             -             -
    Issued under
     employee share
     ownership plan        808,291       638,500             -             -

    Fair value of stock
     options vested              -             -             -             -
    Directors'
     remuneration           73,560        76,502             -             -
    Share bonus            516,886       408,340             -             -
    Warrants issued in
     connection with
     the revolving debt          -             -             -             -

    Revolving debt
     principal payments
     made in shares      2,671,900     1,780,100             -             -

    Warrants issued
     to a consultant             -             -             -             -
    Adjustment for
     conversion of
     fractional shares           6             -             -             -
    -------------------------------------------------------------------------
    Balance, June 30,
     2008               65,782,510    84,222,179           167       161,000
    -------------------------------------------------------------------------
    Less share
     purchase loan               -      (240,000)            -             -
    -------------------------------------------------------------------------
                        65,782,510    83,982,179           167       161,000
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                                    Other
                           Preferred shares -       Special        paid-in
                               Series ll            warrants       capital
                            No.           $             $             $
    -------------------------------------------------------------------------

    Balance, June 30,
     2007                9,000,000     8,798,787     2,174,008     5,528,059
    Transition
     adjustment                  -             -             -             -
    Net loss for
     the year                    -             -             -             -
    Issued under
     employee share
     ownership plan              -             -             -             -

    Fair value of stock
     options vested              -             -             -       388,731
    Directors'
     remuneration                -             -             -             -
    Share bonus                  -             -             -             -
    Warrants issued in
     connection with
     the revolving debt          -             -             -       112,000

    Revolving debt
     principal payments
     made in shares              -             -             -             -

    Warrants issued
     to a consultant             -             -             -        27,325
    Adjustment for
     conversion of
     fractional shares           -             -             -             -
    -------------------------------------------------------------------------
    Balance, June 30,
     2008                9,000,000     8,798,787     2,174,008     6,056,115
    -------------------------------------------------------------------------
    Less share
     purchase loan               -             -             -             -
    -------------------------------------------------------------------------
                         9,000,000     8,798,787     2,174,008     6,056,115
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                         Deficit        Total
                            $             $
    ---------------------------------------------

    Balance, June 30,
     2007              (68,630,615)   29,349,976
    Transition
     adjustment            134,674       134,674
    Net loss for
     the year          (16,255,708)  (16,255,708)
    Issued under
     employee share
     ownership plan              -       638,500

    Fair value of stock
     options vested              -       388,731
    Directors'
     remuneration                -        76,502
    Share bonus                  -       408,340
    Warrants issued in
     connection with
     the revolving debt          -       112,000

    Revolving debt
     principal payments
     made in shares              -     1,780,100

    Warrants issued
     to a consultant             -        27,325
    Adjustment for
     conversion of
     fractional shares           -             -
    ---------------------------------------------
    Balance, June 30,
     2008              (84,751,649)   16,660,440
    ---------------------------------------------
    Less share
     purchase loan               -      (240,000)
    ---------------------------------------------
                       (84,751,649)   16,420,440
    ---------------------------------------------
    ---------------------------------------------



    Bioniche Life Sciences Inc.

           CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

    Years ended June 30

                                                          2008          2007
                                                             $             $
    -------------------------------------------------------------------------

    REVENUE
    Sales                                           27,666,670    27,479,727
    Cost of sales                                   11,837,457    12,179,266
    -------------------------------------------------------------------------
    Gross profit                                    15,829,213    15,300,461
    -------------------------------------------------------------------------

    EXPENSES
    Administration                                   6,710,565     7,239,106
    Marketing and selling                            6,993,390     6,106,225
    Quality assurance                                  767,592       690,291
    Interest on long-term debt                         203,210       637,510
    Other interest, net                                 (1,450)       75,049
    Accreted interest on discounted receivables        (13,819)            -
    Accreted interest on convertible term note               -       722,867
    Amortization of property, plant and equipment    1,202,328     1,169,948
    Amortization of intangible assets                  856,517       856,518
    Amortization of financial expenses                 767,921     1,048,658
    Foreign exchange loss (gain)                       232,822       (55,375)
    -------------------------------------------------------------------------
                                                    17,719,076    18,490,797
    -------------------------------------------------------------------------
    Loss before research and development expenses
     and other items                                (1,889,863)   (3,190,336)

    Research and development expenses, gross        15,972,660    14,935,158
    Less: government incentives, net                (1,918,380)   (1,727,403)
    Change in unrealized loss on foreign currency
     embedded derivatives                              126,988             -
    Loss on sale of investment                               -       192,157
    Gain on sale of rights to future royalty stream          -    (2,127,587)
    -------------------------------------------------------------------------
    Loss before income taxes                       (16,071,131)  (14,462,661)
    Provision for income taxes                         184,577       298,333
    -------------------------------------------------------------------------
    Net loss and comprehensive loss for the year   (16,255,708)  (14,760,994)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic and fully diluted net loss per share           (0.26)        (0.32)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average number of common shares
     outstanding                                    63,104,876    45,827,257
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Bioniche Life Sciences Inc.

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

    Years ended June 30

                                                          2008          2007
                                                             $             $
    -------------------------------------------------------------------------

    OPERATING ACTIVITIES
    Net loss for the year                          (16,255,708)  (14,760,994)
    Add (deduct) non cash items:
      Amortization                                   2,826,766     3,075,124
      Accreted interest on convertible term note             -       722,867
      Change in unrealized loss on foreign
       currency embedded derivatives                   126,988             -
      Unrealized foreign exchange loss                 (34,680)       38,208
      Stock-based compensation                         388,731       221,712
      Warrants issued to consultants                    27,325        39,300
      Share bonus and shares issued to directors       544,507       962,759
      Employee share ownership plan                    684,556       523,559
      Loss on sale of investment                             -       192,157
      Gain on sale of right to future royalty
       stream and royalties recognized                       -    (2,618,306)
    -------------------------------------------------------------------------
                                                   (11,691,515)  (11,603,614)
    Net change in non-cash working capital
     balances                                           48,369       615,806
    -------------------------------------------------------------------------
    Cash used in operating activities              (11,643,146)  (10,987,808)
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
    Acquisition of short-term investments                    -   (11,000,548)
    Proceeds from maturity of short-term
     investments                                     9,500,000     1,500,548
    Government incentives received on account
     of property, plant and equipment                    4,641        30,224
    Proceeds on disposal of property, plant
     and equipment                                           -         4,786
    Proceeds from sale of investment                         -     3,196,200
    Selling costs incurred for sale of investment
     and future royalty stream                               -      (100,000)
    Proceeds from sale of right to future
     royalty stream                                          -     3,652,800
    Purchases of property, plant and equipment        (584,573)     (623,520)
    -------------------------------------------------------------------------
    Cash provided by (used in) investing activities  8,920,068    (3,339,510)
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
    Proceeds from units issued                               -    17,500,000
    Proceeds from over-allotment warrants issued             -        22,500
    Proceeds from exercise of compensation warrants          -        23,730
    Proceeds from exercise of stock options                  -         1,800
    Unit issue costs incurred                                -    (1,906,316)
    Proceeds from term note                          1,750,000             -
    Payment of financing fees - debt                   (88,010)            -
    Proceeds from deferred government incentives        49,965        74,282
    Proceeds from revolving credit facility         26,759,247    21,019,297
    Repayment of revolving credit facility         (22,635,316)  (21,677,375)
    Repayment of capital lease obligations            (217,232)     (198,799)
    Repayment of senior and other long-term debt       (20,108)   (3,101,497)
    -------------------------------------------------------------------------
    Cash provided by financing activities            5,598,546    11,757,622
    -------------------------------------------------------------------------
    Net increase (decrease) in cash and cash
     equivalents during the year                     2,875,468    (2,569,696)
    Cash and cash equivalents, beginning of year     1,523,597     4,093,293
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of year           4,399,065     1,523,597
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    %SEDAR: 00013159EF




For further information:

For further information: Patrick Montpetit, CA, Vice-President and Chief
Financial Officer, Bioniche Life Sciences Inc., Telephone: (514) 697-6636,
Patrick.Montpetit@Bioniche.com; Jennifer Shea, Vice-President, Communications,
Investor & Government Relations, Bioniche Life Sciences Inc., Telephone: (613)
966-8058, Cell: (613) 391-2097, Jennifer.Shea@Bioniche.com

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